Preparing for LNG by Rail Tank Car: A Readiness Review (2022)

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5 Natural gas production in the United States has increased dramatically since the beginning of the twenty-first century, owing to advances in extraction technology. Consisting of methane and other hydrocarbon gases, extracted natural gas is processed to meet a minimum standard for methane content for transportation by pipeline.1 A network of gas transmission pipelines spans the continental United States to undergird the long-distance trans- portation from upstream extraction and processing sites to local utilities, manufacturers, and other end users.2 The pipeline network is especially critical for natural gas shipments because of its efficiency in transporting pressurized gases when compared with other modes. However, pipeline networks do not reach across oceans, and their scope is limited in certain domestic regions. In regions where the gas transmission pipeline network lacks sufficient capacity and connectivity between producers and end users, natural gas is shipped as a cryogenic liquid. Liquefied natural gas (LNG; also known as refrigerated liquid methane) is produced by super-cooling natural gas to –260°F (–162°C). The resulting dense liquid is economical to store and ship by transportation modes other than pipelines. LNG is valued by gas utilities for its compact storage and ability to be regasified at peak-shaving plants 1 40 CFR § 72.2, “Pipeline natural gas.” “[P]ipeline natural gas must either be composed of at least 70 percent methane by volume or have a gross calorific value between 950 and 1100 Btu per standard cubic foot.” 2 There are approximately 300,000 miles of transmission pipeline. Pipeline Mileage and Fa- cilities, https://www.phmsa.dot.gov/data-and-statistics/pipeline/pipeline-mileage-and-facilities. 1 Introduction

6 PREPARING FOR LNG BY RAIL TANK CAR to meet surges in the demand for heating fuel during winter months. For decades, LNG has been imported into the United States as a peak-shaving fuel, especially in New England, where the transmission pipeline network is limited. Thus, the domestic demand for LNG has depended in large part on the extent of the natural gas pipeline network. Although a long-time importer of LNG, the United States recently transitioned from a net importer to a net exporter.3 This transition followed the large increase in domestic natural gas production that began with the maturation of horizontal drilling and hydraulic fracturing.4 While LNG can be expensive to produce5 and transport,6 U.S. gas producers have benefited from the growing demand for overseas exports in ships that can hold tens of millions of gallons of product. Shippers also move smaller quantities of LNG by truck and marine vessel in intermodal containers able to hold up to about 10,000 gallons. LNG thus serves an important role in the global energy market. Because of its portability, LNG can be traded to respond to geographic and seasonal variations in fuel demand, thereby smoothing out international fuel price differentials.7 Significantly, railroads have only recently been used to transport LNG within the United States, and even then, in limited quantities using inter- modal containers. Responsibility for regulating the movement of LNG, including the modes and containers used, rests with the U.S. Department of Transportation (U.S. DOT). In implementing the U.S. DOT’s Hazard- ous Materials Regulations (HMR), the Pipeline and Hazardous Materials Safety Administration (PHMSA) has long had the authority to allow LNG to be shipped in these intermodal containers, but it had been mainly trans- ported by marine vessel and truck. Starting in 2015, the Federal Railroad Administration (FRA) issued letters of approval for intermodal containers laden with LNG to be transported by rail. Shortly thereafter, in 2017, the 3 U.S. Energy Information Administration, “Liquefied Natural Gas,” July 15, 2020, https:// www.eia.gov/energyexplained/natural-gas/liquefied-natural-gas.php. 4 E. Russell Braziel, The Domino Effect (Arlington, VA: NTA Press, 2016), p. 11. 5 Although the cost varies, the estimate for liquefaction was reported as ranging $4 to $5 per million Btu, which at the time of the presentation to the committee was about double the unit cost of natural gas. Pedro Santos, “Information Presentation: LNG Logistics,” com- mittee presentation, September 21, 2021, http://onlinepubs.trb.org/onlinepubs/C4rail/Santos CNGmotiveIncAlternativeRailEnergy092021.pdf. 6 For reference, based on the 156 LNG cargoes exported by cryogenic intermodal con- tainer in 2021, the price for LNG exports was double the price of exports by vessel (i.e., LNG tanker). Michael Ratner, “U.S. Natural Gas: A Catalyst for Change,” committee pre- sentation, September 21, 2021, http://onlinepubs.trb.org/onlinepubs/C4rail/RatnerCSSLNG Perspective92021.pdf. 7 Samir Mosis, “Global LNG Market Overview and Outlook,” committee presentation, September 21, 2021, http://onlinepubs.trb.org/onlinepubs/C4rail/SandPGlobalSameretal GlobalLNGMarket092021.pdf.

INTRODUCTION 7 Association of American Railroads (AAR) petitioned PHMSA to amend the HMR to authorize LNG’s transportation in DOT-113C120W and DOT- 113C140W cryogenic tank cars.8 These tank cars, which are fabricated with inner and outer tanks for thermal insulation and impact protection, had already been approved by PHMSA to ship other cryogenic liquids such as argon, ethylene, nitrogen, and oxygen. The AAR petition contends that LNG had been omitted from the list of commodities approved for transport in DOT-113 tank cars because there had been no market demand for the commodity’s shipment at the time of the approvals. AAR further main- tained that the DOT-113 tank car should be approved for LNG because its properties are comparable to those of other cryogenic liquids that are approved. During its consideration of the AAR petition, PHMSA issued a special permit in December 2019 for rail shipments of LNG in the DOT-113C120W tank car on a route from Wyalusing, Pennsylvania, to Gibbstown, New Jersey.9 The route would originate at an LNG production facility in the gas–rich shale play in the Marcellus Formation. It would end at an export terminal along the New Jersey coast that remains subject to permitting approval.10 Responding to Executive Order 13868,11 PHMSA published a notice of proposed rulemaking (NPRM) to authorize LNG shipments by rail tank car in October 2019. In July 2020, PHMSA issued a final rule, in coordination with FRA, to authorize transportation of LNG in a newly specified DOT- 113 tank car, the DOT-113C120W9 tank car. The new “W9” specification differs from the DOT-113C120W in that it requires an outer tank made of a thicker plate of a more puncture-resistant steel. The final rule also included requirements for train operational controls and safety and security route planning comparable to those that have been in place for hazardous mate- rial shipments that are explosive or poisonous when inhaled. On November 8, 2021, PHMSA issued another NPRM to suspend the final rule’s authorization of LNG transportation in the DOT-113C120W9 8 Association of American Railroads, “Petition for Rulemaking to Allow Methane, Refriger- ated Liquid to Be Transported in Rail Tank Cars,” January 13, 2017, https://www.regulations. gov/document/PHMSA-2017-0020-0002. 9 Pipeline and Hazardous Materials Safety Administration, “Special Permit DOT-SP 20534, Granted to Energy Transport Solutions, LLC,” December 5, 2019, https://www.phmsa.dot. gov/sites/phmsa.dot.gov/files/docs/safe-transportation-energy-products/72906/dot-20534.pdf. 10 Michael Rubinkam, “East Coast Natural Gas Plant on Hold After Legal Challenge,” AP News, March 21, 2022, https://apnews.com/article/business-environment-pennsylvania- environment-philadelphia-8b44e0a365b8ba075b81b4c4f57cfa35. 11 Executive Office of the President, “Executive Order 13868, Promoting Energy Infrastruc- ture and Economic Growth,” Federal Register, 84 FR 15495, April 15, 2019, https://www. federalregister.gov/documents/2019/04/15/2019-07656/promoting-energy-infrastructure-and- economic-growth.

8 PREPARING FOR LNG BY RAIL TANK CAR tank car.12 In the notice, PHMSA pointed to the importance of completing the planned tank car testing and analyses and responding to a mandate in Executive Order 13990 calling for agencies to review recent actions that could be obstacles to federal policies promoting public health and safety, the environment, and climate change mitigation. In this latest NPRM, the agency proposed that it would consider further regulatory action during the suspension, possibly to include maintaining the final rule or modifying it to authorize only ad hoc movements of LNG as had been done before the 2020 final rule. The notice states that decisions would be made on the basis of the best available science and data, including the findings from this congressionally requested study. STUDY ORIGIN Following AAR’s petition in 2017, concerns were raised about the safety of transporting LNG by rail tank car, owing to the potential of ignition of LNG if released in a train derailment.13 Thus, during their review of the pe- tition and to inform their proposed rulemaking, PHMSA and FRA formed an LNG-by-rail task force (Task Force) to better understand, predict, and reduce the risks associated with derailment of a train transporting LNG. The Task Force pursued 15 tasks that covered topics such as a survey of international LNG transportation, a quantitative risk assessment, worst- case scenario modeling, fire testing of a UN-T75 cryogenic portable tank that shares some of the design features of the DOT-113, and consultations with emergency responders. While the Task Force’s work proceeded, and prior to when PHMSA is- sued its final rule approving the movement of LNG by the DOT-113C120W9 tank car in July 2020, Congress directed PHMSA to commission a study by the Transportation Research Board of the National Academies of Sciences, Engineering, and Medicine (the National Academies) on the safe transpor- tation of LNG by rail tank car.14 As explained in the Preface, the National Academies convened a committee of independent experts to conduct the 12 Pipeline and Hazardous Materials Safety Administration, “Hazardous Materials: Suspen- sion of HMR Amendments Authorizing Transportation of Liquefied Natural Gas by Rail,” Federal Register, 86 FR 61731 (2021), https://www.govinfo.gov/content/pkg/FR-2021-11-08/ pdf/2021-23132.pdf. 13 Pipeline and Hazardous Materials Safety Administration, “Hazardous Materials: Lique- fied Natural Gas by Rail—Final Rule,” 85 FR § 44994, 2020, https://www.federalregister. gov/documents/2020/07/24/2020-13604/hazardous-materials-liquefied-natural-gas-by-rail. See page 45022, “Comments of General Opposition.” 14 Further Consolidated Appropriations Act of 2020: Committee Print of the Committee on Appropriations, U.S. House of Representatives, P.L. 116-94, January 2020, https://www. govinfo.gov/content/pkg/CPRT-116HPRT38679/pdf/CPRT-116HPRT38679.pdf.

INTRODUCTION 9 study in two phases to produce two reports. The first phase would provide near-term feedback regarding the work and plans of the Task Force. The findings from the first phase of the study were reported in June 2021 in Preparing for LNG by Rail Tank Car: A Review of a U.S. DOT Safety Research, Testing, and Analysis Initiative.15 In the second phase, the com- mittee is charged with reviewing the experience of transporting LNG in bulk shipments by other modes, what is known about the effectiveness of the kinds of regulatory and industry measures put in place to ensure the safe transportation of LNG by rail tank car, and the state of emergency response preparedness for rail incidents involving LNG shipments. Informed by this review, the committee is asked to consider any actions, both near and long term, that are warranted to improve understanding of the risks associated with transporting LNG by rail, mitigate risks, and prevent and prepare for potential incidents. The full Statement of Task for the two phases is provided in Box 1-1. BOX 1-1 Statement of Task An ad hoc committee appointed by the National Academies of Sciences, Engi- neering, and Medicine will review, per request of Congress, current U.S. Depart- ment of Transportation (U.S. DOT) plans and activities to inform government and industry decisions about the transportation of liquefied natural gas (LNG) by rail and consider ways to ensure the continued safety of these shipments over the longer term. The committee’s review will be carried out in two phases, each producing a report with findings and recommendations as appropriate. Phase 1 The committee will review ongoing and planned U.S. DOT efforts, as documented and reported by the Pipeline and Hazardous Materials Safety Administration (PHMSA) and the Federal Railroad Administration (FRA), that are intended to inform pending decisions about whether and how bulk shipments of LNG can be safely transported by rail tank car. The review will focus specifically on the plans and progress of the PHMSA–FRA LNG Task Force, which has developed and begun executing a multitask program of research, data gathering, analysis, testing, modeling, and risk assessment. Based on the expert judgment of its members, and drawing largely on the Task Force’s reports of results, ongoing and planned tasks, and other relevant information, the committee will produce a report with findings on specific tasks and the program overall with regard to quality, completeness, and relevance to the agencies’ near-term decision-making needs. The committee may make recommendations in this first report that can be acted on quickly to strengthen the program. 15 National Academies of Sciences, Engineering, and Medicine, Preparing for LNG by Rail Tank Car: A Review of a U.S. DOT Safety Research, Testing, and Analysis Initiative (Wash- ington, DC: The National Academies Press, 2021), https://doi.org/10.17226/26221. continued

10 PREPARING FOR LNG BY RAIL TANK CAR Phase 2 The committee will engage in information gathering and analysis to conduct an in-depth study of topics relevant to ensuring the safe movement of LNG by rail if allowed by special permit or regulatory authorization. At a minimum, the com- mittee will examine • The experience of transporting LNG in bulk shipments by other modes, including by water and truck, to identify basic principles applied for safety assurance that can inform measures taken by government and industry to ensure the safe movement of LNG by rail; • What is known about the effectiveness of special regulatory and in- dustry measures intended to ensure the safe transportation of other relevant bulk rail shipments of hazardous materials, especially any routing, speed, and other operational controls applied to high-hazard flammable trains and accompanying enhanced track inspection re- gimes; and • The applicability to bulk rail transportation of LNG of current emer- gency response plans, protocols, and guides for responding to LNG transportation incidents, such as in PHMSA’s Emergency Response Guidebook. In carrying out its review of these topics, the committee may determine that there are other topics directly relevant to the safe transportation of LNG by rail that warrant examination, and it may elect to do so. Based on findings from the study, the committee will issue a second report containing recommendations as appropriate to Congress, PHMSA, FRA, industry, emergency responders, and other relevant parties on actions, both nearer and longer term, that are warranted to improve understanding of the risks associated with transporting LNG by rail, mitigate risks, and prevent and prepare for potential incidents. PHASE 2 STUDY APPROACH In the first phase, the committee evaluated the Task Force’s work plan and found it to be largely comprehensive and well designed. While the com- mittee made several recommendations for the Task Force to improve the description and documentation of its work, the Task Force’s limited lifespan presented few opportunities for the committee to advise on future work, apart from improvements to testing and analyses that were planned but delayed during the COVID-19 pandemic. Notably, the committee observed that a second phase of portable tank fire testing was still being planned and that opportunities existed to modify the testing plan to improve the data quality and analysis. The actions recommended included using LNG (rather than propane) as the pool fire fuel, modifying the pool fire by increas- ing its size and making it circular, placing the portable tank in a rollover BOX 1-1 Continued

INTRODUCTION 11 orientation where the pressure relief valve will vent liquid, evaluating an LNG fireball and tank fragmentation in the event of overheating and high- pressure release to prepare emergency response personnel, and assessing the potential for cryogenic damage cascading to adjacent tanks by evalu- ating the topography surrounding the rail tracks that could support pool formation. For reasons that are explained more fully in this report, these recommendations stemmed from concern over the high heat flux that can be created from an LNG pool fire and the potential for releases of cryogenic LNG to cause embrittlement of the outer tank steel. To build on information gleaned during the first phase, the committee held a series of public data-gathering sessions, inviting dozens of subject- matter experts to present on topics relevant to the study charge. Experts presented on the LNG market outlook; rail operations, safety, and security; hazardous materials transportation; means of ensuring the safety of LNG shipments in the maritime and trucking modes; risk management at LNG liquefaction facilities and terminals; potential consequences of a release of LNG; and the state of emergency preparedness and response to LNG inci- dents. The presenters are acknowledged in the Preface. Informed by this data gathering, the committee considered potential hazards arising from an incident involving a release of LNG during railcar loading and unloading and during a derailment and collision.16 The com- mittee decided to focus its attention on derailments of multiple tank cars as a candidate pathway for the double-walled cryogenic tank car to be compromised and for released LNG vapor to catch fire. The recent history of tank cars carrying crude oil and ethanol catching fire after being punc- tured during a derailment reinforced the decision to focus on such highly kinetic events. The committee’s ability to assess the likelihood of risks was hampered by uncertainty about the future of LNG transportation by rail, including whether shipments will be made at all, much less in trains carrying multiple LNG tank cars. As of the preparation of this report during the summer of 2022, railroads had not transported LNG by tank car, nor were there in- dications about when such service would commence because no upgraded DOT-113 tank cars had entered the fleet. Still, the experience with crude oil and ethanol bears keeping in mind, as rail shipments of these flammable liquids grew rapidly before industry and regulators were fully aware of and able to manage their risks. 16 While other conceivable hazards—such as acts of terrorism—warrant attention, the long- standing programs and regulatory framework for preventing a deliberate act or the outcome of such an act are identical to those required for all hazardous materials, including materials toxic by inhalation (e.g., chlorine and anhydrous ammonia) and high-hazard flammable trains carrying crude oil or ethanol.

12 PREPARING FOR LNG BY RAIL TANK CAR Thus, with the future role of rail in transporting LNG being uncertain, the second phase of the study is intended to inform the decisions that lie ahead for PHMSA and FRA as they consider additional steps to ensure safety. The committee set out to identify those areas where additional inves- tigation, analysis, and monitoring may be warranted so that industry and regulators can better assess and manage LNG’s risks in rail transportation. To develop its report, the committee reviewed the experience with and safety measures used by other modes when transporting LNG; the regula- tory and industry-based framework of guidance and rules to ensure the safe transportation of hazardous materials such as LNG; and the applicability of current emergency preparedness and response guidance and plans such as AAR’s Recommended Railroad Operating Practices for Transportation of Hazardous Materials (Circular No. OT-55) and PHMSA’s Emergency Response Guidebook. The committee thus exercised judgment in consider- ing data and applying lessons from sectors with a track record of safely handling and transporting LNG such as liquefaction facilities, marine ves- sels, and motor carriers. REPORT ORGANIZATION The remainder of the report consists of six chapters. The next chapter (Chapter 2) provides an overview of the LNG facilities where these ship- ments originate and terminate and discusses the types of containers used to move the shipments by truck, train, and ship. It then considers the potential future demand for shipping LNG by rail. Chapter 3 describes the composi- tion of LNG and the hazards associated with its cryogenic and flammable properties. The chapter then compares the properties of LNG to those of other cryogenic and flammable materials that are transported by rail in tank cars in the United States. Chapter 4 provides an overview of the key design features of common cryogenic containers, including the DOT-113 tank car and its upgraded specification for LNG. The discussion then considers hazard scenarios for LNG in a tank car involved in a derailment. Chapter 5 describes the regulations and industry practices regarding movement of LNG and other hazardous materials by rail, such as high-hazard flammable trains. The chapter reviews the safety record of transporting LNG and other cryogenic and flammable materials, as well as the history of moving LNG by rail in Japan. Chapter 6 describes emergency preparedness and response planning for moving LNG and other hazardous materials by all modes of transporta- tion, with a focus on rail. Consideration is given to the challenges that LNG presents for emergency response, emergency planning and preparedness, and LNG training. Chapter 7 contains a summary of the study findings and the committee’s recommendations in fulfillment of the Statement of Task.